On The Improvement Of Government Financial Information Disclosure Of China

Many factors may influence and advance the reform of government financial disclosure, such as the pressure on government finance, the influence of capital market, external accounting principle formulation institution, and the interests of professional accounting groups. On a global scale, one of the major motives for the reform is financial pressure caused by debt risk, and China is experiencing the same kind situation now. Local government debt risk has gradually become the most pressing and significant reason to improve China's government financial information disclosure. The government accounting system is responsible for providing information on government finance, including government debt. Nevertheless, the absence of certain functions of current government accounting system, the lack of thorough analysis and other problems have hindered the birth of a comprehensive, reasonable and effective disclosure of local government debt, and greatly impeded the supervision and control of local government debt risk. Under those circumstances, it has become a significant theoretical and practical concern of Chinese accounting circle to study and strength government financial information disclosure and to develop a sound government accounting system for the purpose of monitoring local government debt risk.Under the guidance of Government Functions theory, Public Choice theory, Public Goods theory and other theories, this dissertation investigates related concepts of government financial information disclosure, proposes foundamental framework such as definition, qualitative characteristics, disclosure target, accounting basis, form and content. Employing both normative and empirical analysis, this dissertation examines both the experience and problems of our government's financial information disclosure system and explores the origins of those problems. It also summarizes helpful common practices and beneficial experience by analyzing and comparing practices of representative countries such as United States, United Kingdom and France, and the financial disclosure practices of domestic enterprises as well. Based on those said researches, this dissertation proposes the overall goal and periodical goals of the government financial information disclosure reform, namely, the short-term goal, the mid-term goal and the long-term goal, then it elaborates a step-by-step plan to gradually carry the reform forward, and tries to expound these thoughts and measures:Aiming at tackling the most pressing local government debt risk issues, the short-term goal is to provide sound information on government debt. To achieving this goal, it is suggested to promote with cautiousness the transformation of accounting basis of local government debt. This dissertation starts from reforming the government debt accounting method in the budget accounting system by accounting and disclosing debt of government at a certain level through combining accrual basis with cash basis, namely, maintaining those items adopting cash basis while adding some debt items employing accrual basis which have not been appropriately reflected in the current budget accounting system yet have had a strong influence on decision making, thus to satisfy users'needs and disclose information on government debt to a larger extent. Furthermore, this dissertation constructs a government debt risk warning and disclosure mechanism and has its feasibility tested by using public statistics.Taking the influence of environment change into consideration, the mid-term goal is to extend the coverage of government financial information disclosure. To accomplish this goal, it is recommended to run pilot projects of government financial report in chosen areas before testing it nationally. Since relevant government financial government accounting system is not in place, this dissertation proposes to collect, arrange and disclose relevant government financial information through switching budget accounting statistics, defines the major content, the main body, the integration scope covered of government financial report, and the said report's relationship with the budget report. It studies and designs a financial information disclosure mechanism with a customized implementation plan for our government.The long-term goal is a comprehensive reflection of government accountability responsibility, which requires a sound government accounting system and adequate emphasis of the joint effect of government management accounting, auditing and assurance on government financial information disclosure in China. Therefore, this dissertation proposed a three-railed government accounting system template with Chinese characteristics. The template is composed by independent sub-systems, namely, government financial accounting and budget accounting, and government management (cost) accounting as a supplement. Focusing on the main body, information users, form and content, disclosure target, accounting basis and qualitative characteristics of China's government financial information disclosure system, this dissertation presents its developing strategy. Moreover, this dissertation explores the way to strength China's government financial information disclosure through planning and designing, integrating and improving government financing accounting and budget accounting system, and the method to maximize the synergistic effect of government management accounting, auditing and assurance on the system.